THIRD AMENDMENT TO RESTATED CREDIT AGREEMENT

         THIS  DOCUMENT is entered  into to be effective as of January 30, 1998,
between KANEB PIPE LINE OPERATING  PARTNERSHIP,  a Delaware limited  partnership
('BORROWER'),  Lenders, and CHASE BANK OF TEXAS,  NATIONAL ASSOCIATION (formerly
known as  Texas  Commerce  Bank  National  Association,  ('AGENT') as Agent for
Lenders.

         Borrower, Agent, and Lenders are party to the Restated Credit Agreement
(as amended through the date of this document and as further renewed,  extended,
amended,  and restated,  the ('CREDIT  AGREEMENT') dated as of December 22, 1994
providing for a $15,000,000 revolving credit facility (the 'REVOLVING FACILITY')
and the  issuance  of  letters  of  credit  up to an  aggregate  face  amount of
$4,118,000.  Borrower,  Agent, and Lenders have agreed, upon the following terms
and conditions, to amend the Credit Agreement to provide for (a) an extension of
the stated date of maturity for the Revolving  Facility,  (b) an increase in the
maximum amount available under the Revolving  Facility,  and (c) modification of
certain pricing terms.  Accordingly,  for adequate and sufficient consideration,
Borrower, Agent, and Lenders agree as follows:

1.       TERMS AND REFERENCES.  Unless otherwise stated in this document,  terms
         defined in the Credit  Agreement  have the same  meanings  when used in
         this document.

2.       AMENDMENT  TO CREDIT  AGREEMENT.  The  Credit  Agreement  is amended as
         follows:

(A)      CLAUSE (B) in the  definition  of LIBOR RATE in SECTION 1 is amended as
         follows:
                   (b) A margin of interest  that, for any day, is determined on
          the basis of the ratio of the KPP Companies consolidated Funded Debt
          to EBITDA, as follows:

         RATIO OF FUNDED DEBT TO EBITDA                            MARGIN
         3.00 to 1.00 or more                                      0.875%
         Less than 3.00 to 1.00, but 2.50 to 1.00 or more          0.625%
         Less than 2.50 to 1.00, but 2.00 to 1.00 or more          0.500%
         Less than 2.00                                            0.375%
 
                  For purposes of calculating  that ratio,  EBITDA is calculated
         for the KPP Companies'  most  recently-completed-four-fiscal  quarters,
         and Funded Debt is  determined  as of the day the margin of interest is
         determined.  EBITDA  is  determined  from the  Current  Financials  and
         related  Compliance  Certificate then most recently delivered to Agent,
         effective as of the date received by Agent. If Borrower fails to timely
         furnish  to Agent  any  Financial  Statements  and  related  Compliance
         Certificates  required  by this  agreement,  then the  margin of 1.125%
         shall  apply and  remain in effect  until  Borrower  furnishes  them to
         Agent.

(B)      SECTION 1.1 is further  amended by entirely  amending the definition of
         STATED  TERMINATION  DATE, as follows:  STATED  TERMINATION  DATE means
         January 31, 2001.

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(C)      SECTION 2.1(B) is entirely amended, as follows:

             (b) the Principal Debt (other than for payments under LCs) may
         never exceed $25,000,000,

(D)      SECTION 4.3 is entirely amended, as follows:

                  4.3  Commitment  Fee.  Borrower  shall  pay to  Agent  for the
         account of Lenders (based on their respective Commitment Percentages) a
         commitment  fee,  payable as it accrues from the date of this agreement
         as of  the  last  day of  each  February,  May,  August,  and  November
         (commencing  February 28, 1998), and on the Termination  Date, equal to
         the  Applicable  Percentage  (per annum) of the amount by which (a) the
         total  Commitments  exceeds  (b) the  average-daily  Commitment  Usage,
         determined for the calendar  quarter (or portion of a calendar  quarter
         commencing on the date of this  agreement or ending on the  Termination
         Date) preceding and including the date it is due.

                  For  purposes  of this  SECTION  4.3,  the  term,  'APPLICABLE
         PERCENTAGE' means, for any day, a commitment fee percentage subject to
         adjustment (upwards or downwards,  as appropriate),  based on the ratio
         of the KPP Companies' Funded Debt to EBITDA, as follows:
 
          RATIO OF FUNDED DEBT TO EBITDA                     PERCENTAGE

          Greater than 2.50 to 1.00                             0.20%
          Less than or equal to 2.50 to 1.00                    0.15%
 

                  For purposes of calculating  that ratio,  EBITDA is calculated
         for the KPP Companies'  most  recently-completed-four-fiscal  quarters,
         and Funded Debt is determined as of the day the  commitment fee is due.
         EBITDA is determined from the Current Financials and related Compliance
         Certificate then most recently delivered to Agent,  effective as of the
         date received by Agent.  If Borrower  fails to timely  furnish to Agent
         any Financial Statements and related Compliance  Certificates  required
         by this  agreement,  then the percentage of .20% shall apply and remain
         in effect until Borrower furnishes them to Agent.

                  3.  CANCELLATION  OF LC  AVAILABILITY.  As of the date of this
         document,  the LC  Exposure is $0.00.  Notwithstanding  anything in the
         Loan Documents to the contrary,  Lenders=  Commitments  with respect to
         LCs are hereby  cancelled,  and commencing on the date of this document
         neither Agent nor any of its Affiliates shall, under any circumstances,
         issue LCs under the Credit Agreement.

                  4.   CONDITIONS   PRECEDENT.   Notwithstanding   any  contrary
         provision,  PARAGRAPH 2 of this  document is not  effective  unless and
         until (A) the  representations and warranties in this document are true
         and correct and (B) Agent  receives (1)  counterparts  of this document
         executed  by each party  named on the  signature  page or pages of this
         document,  and (2) each  item  described  on ANNEX 1  attached  to this
         document, each in form and substance satisfactory to Agent.

<PAGE>


                  5.  RATIFICATIONS.  Borrower  (A)  ratifies  and  confirms all
         provisions of the Loan Papers as amended by this document, (B) ratifies
         and  confirms  that all  guaranties,  assurances,  and  Liens  granted,
         conveyed,  or assigned to Agent under the Loan Papers are not released,
         reduced,  or otherwise adversely affected by this document and continue
         to guarantee,  assure,  and secure full payment and  performance of the
         present and future Obligation,  and (C) agrees to perform such acts and
         duly authorize,  execute,  acknowledge,  deliver, file, and record such
         additional  documents and certificates as Agent may request in order to
         create,  perfect,  preserve, and protect those guaranties,  assurances,
         and Liens.

                  6. REPRESENTATIONS.  Borrower represents and warrants to Agent
         that as of the  date  of this  document  (A)  all  representations  and
         warranties  in the Loan  Papers are true and  correct  in all  material
         respects except to the extent that (1) any of them speak to a different
         specific  date or (2) the facts on which any of them  were  based  have
         been changed by  transactions  contemplated  or permitted by the Credit
         Agreement,  and (B) no Material  Adverse  Event,  Default or  Potential
         Default exists.

                  7. EXPENSES.  Borrower shall pay all costs, fees, and expenses
         paid or incurred by Agent incident to this document, including, without
         limitation,  the  reasonable  fees and  expenses of Agent=s  counsel in
         connection with the negotiation,  preparation,  delivery, and execution
         of this document and any related documents.

                  8. MISCELLANEOUS.  This document is a 'Loan Paper' referred to
         in the Credit Agreement,  and the provisions relating to Loan Papers in
         SECTIONS  1 and 14 of the Credit  Agreement  are  incorporated  in this
         document by reference.  Unless stated otherwise (A) the singular number
         includes the plural and vice versa and words of any gender include each
         other gender,  in each case, as appropriate,  (B) headings and captions
         may not be construed in interpreting provisions, (C) this document must
         be construed, and its performance enforced, under Texas law, (D) if any
         part of this document is for any reason found to be unenforceable,  all
         other  portions of it  nevertheless  remain  enforceable,  and (E) this
         document  may be executed in any number of  counterparts  with the same
         effect as if all signatories  had signed the same document,  and all of
         those  counterparts  must be construed  together to constitute the same
         document.

                  9.  ENTIRETIES.  THIS DOCUMENT  REPRESENTS THE FINAL AGREEMENT
         BETWEEN THE PARTIES  ABOUT THE SUBJECT  MATTER OF THIS DOCUMENT AND MAY
         NOT  BE  CONTRADICTED  BY  EVIDENCE  OF  PRIOR,   CONTEMPORANEOUS,   OR
         SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL
         AGREEMENTS BETWEEN THE PARTIES.

                  10.  PARTIES.  This  document  binds and  inures to  Borrower,
         Agent, Lenders, and their respective successors and assigns.

                                                                       
<PAGE>



                         THIRD AMENDMENT SIGNATURE PAGE
            
         EXECUTED to be effective as of the date first stated above.


KANEB PIPE LINE OPERATING         CHASE BANK OF TEXAS, NATIONAL  ASSOCIATION,
PARTNERSHIP, as Borrower          formerly known as Texas Commerce Bank  N.A.,
                                  as Agent and Lender

By KANEB PIPE LINE COMPANY,
   General Partner

By Edward D. Doherty              By Donna German, Senior Vice President


                                  BANK OF MONTREAL, as a Lender

                                  By Donald G. Skipper, Director,
                                     U.S. Corporate Banking

         To  induce  Agent  and  Lenders  to  enter  into  this  document,   the
undersigned  consent and agree (A) to its execution and delivery,  (B) that this
document  in  no  way  releases,  diminishes,  impairs,  reduces,  or  otherwise
adversely  affects any Liens,  guaranties,  assurances,  or other obligations or
undertakings  of any of the  undersigned  under any Loan  Papers,  and (C) waive
notice of acceptance of this consent and agreement,  which consent and agreement
binds the undersigned and their  successors and permitted  assigns and inures to
Agent and their respective successors and permitted assigns.


KANEB PIPE LINE PARTNERS, L.P.                SUPPORT TERMINALS OPERATING
                                              PARTNERSHIP, L.P., as a Guarantor

By  KANEB PIPE LINE COMPANY,                  By  SUPPORT TERMINAL SERVICES INC.
    General Partner                               General Partner

By  Edward D. Doherty, Chairman               By  Edward D. Doherty, Chairman  


STANTRANS, INC., AND SUPPORT                  STANTRANS PARTNERS, L.P.,
TERMINAL SERVICES, INC., as Guarantors        as a Guarantor

                                              By  STANTRANS, INC.,
                                                  General Partner

By  Edward D. Doherty, Chairman               By  Edward D. Doherty, Chairman 
    of both the above corporations

  
STANTRANS HOLDING, INC.,
as a Guarantor